Gilead stock price ‘does not’ reflect its oncology business: Analyst

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Gilead Sciences Inc (NASDAQ: GILD) ended in the green on Tuesday after a JPMorgan analyst turned bullish on the biopharmaceutical company.

Gilead stock should be worth $80 a share

Chriss Schott now rates this healthcare name at “overweight” and sees upside to $80 a share – about a 25% increase from here.

One of the more obvious reasons why he likes Gilead Sciences is its HIV franchise. The analyst wrote:

We have its HIV franchise growing a low single digit CAGR though early 2030s. During this time, we see Biktarvy remaining the dominant product with revenues growing from $10.2 billion in 2022 to $12.5 billion in 2025.

Schott sees big future for Descovy as well.

In August, the biotech company reported market-beating results for its fiscal second quarter. Gilead stock is down about 10% for the year.

Gilead Sciences has a tempting dividend yield

The Nasdaq-listed firm also has an emerging “oncology” business, which, as per the JPMorgan analyst, is entirely not reflected in the current stock price.

Gilead’s HIV business alone supports its entire market cap. With an oncology franchise we forecast to reach ~$5.0 billion in sales by 2030 as well as potential upside to lenacapravir estimates, we see shares as clearly undervalued.

Healthcare stocks are known to do well in a recession that’s likely coming. “That” with a rather lucrative 4.47% dividend yield makes it all the more attractive to buy Gilead stock here.

Shares are currently trading well below the average of their price-to-earnings multiple over the past five years.  

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